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Global Economy

Multipolar Economic Order

January 22, 2023 Ben Norton, Geopolitical Economy Report. , , ,
The international economic system had been dominated for decades by the United States, but this financial architecture is rapidly fracturing with the creation of new institutions in the Global South. The BRICS bloc of Brazil, Russia, India, China, and South Africa is working “to develop a fairer system of monetary exchange”, to challenge the “dominance of the dollar”, South Africa’s foreign minister has revealed. Saudi Arabia publicly confirmed that it is considering selling its oil in other currencies. China’s President Xi Jinping said Beijing will buy energy from the Persian Gulf states in its own currency, the renminbi. Prominent economist Zoltan Pozsar, of the Swiss investment bank Credit Suisse, has observed that the “unipolar era” of US hegemony is quickly being replaced with a new “multipolar” order of “one world, two systems”.

Richest 1% Took 2/3rds Of Global Wealth Since 2020

January 18, 2023 Ben Norton, Geopolitical Economy Report. , , ,
In the past decade, the richest 1% of people on Earth sucked up half of all new wealth. In 2020 and 2021, the richest 1% took nearly two-thirds of all new wealth – six times greater than the wealth made by the poorest 90% of the global population. “Since 2020, for every dollar of new global wealth gained by someone in the bottom 90%, one of the world’s billionaires has gained $1.7 million”, wrote Oxfam. In the meantime, global poverty is getting worse, not better. These shocking statistics were published in “Survival of the Richest“, a report authored by Oxfam, an international humanitarian organization dedicated to fighting poverty and hunger. The document details how, while hundreds of billions of working people across the planet suffer from hunger, insecurity, rising costs of living, and decreasing wages, “The very richest have become dramatically richer and corporate profits have hit record highs, driving an explosion of inequality”.

Davos Elites Can’t Solve The Problems They Create

January 17, 2023 Grace Blakeley, Tribune Magazine. , , , ,
At the start of each year, the World Economic Forum—organiser of the annual Davos conference currently underway in Switzerland—releases its list of the ‘global risks’ expected to dominate over the following twelve months. This year, researchers at the WEF decided that these risks are so great, and so interwoven, that we are now entering an era of ‘polycrisis’. The clearest risk in the immediate term is a global recession. The UK, most of Europe and the US are pretty much guaranteed to go into recession in 2023. The downturn will be worse in Europe due to the ongoing energy crisis and the war in Ukraine. The fact that an inflationary crisis—and, relatedly, a cost of living crisis—is taking place alongside this economic downturn makes the outlook even more grim. We’ve had a decade of slow growth and, looking ahead, it’s hard to see where growth is going to come from in the future.

The New World Economy

January 17, 2023 Jeffrey D. Sachs, Orinoco Tribune. , , ,
Belém, Brazil – I inaugurate this new series of columns in a New Year and a new beginning for Brazil with the inauguration of President Lula da Silva. His well-wishers poured out across the country in a revival of hope for Brazil after four years of disastrous rule under his right-wing predecessor, Jair Bolsonaro, who had fled Brazil for Florida on the eve of Lula’s inauguration. Bolsonaro left behind a mob that rampaged government office buildings before being arrested in large numbers by the police. The mob tactics will not stop Lula, nor will they have a long-term effect in the US, where Donald Trump’s similar maneuvers on January 6, 2021, were also shut down. In both cases, demagogic politicians used social media to rile up a mob; in both cases, the mob was put down within the day. The real issue, in my mind, is not the mob, but the deeper changes in the world that are generating growing tensions in world politics and economy.

Multipolarity And The Decline Of US Hegemony

January 15, 2023 Radhika Desai and Michael Hudson, Geopolitical Economy Report. , ,
[Unlike] all those people talking about globalization and U.S. hegemony, Michael could see, and I also could see, the fractures underlying the system. My own approach has been characterized by such skepticism about enduring Western dominance, U.S. hegemony, dollar dominance, etc. And after thinking and writing about small bits of it for a couple of decades I eventually came up with this book, Geopolitical Economy, from which Ben [Norton] has also taken the title of Geopolitical Economy Report, with which of course we are collaborating. In Geopolitical Economy, I question the dominant cosmopolitan understandings of the world. In ‘globalization discourse’ the world is seamlessly united by markets. In ‘American hegemony discourse’, or ‘hegemony-stability discourse’, the world is united by a single leading power. None of these narratives are really true, and the advance of multipolarity, which I’ve argued goes back at least to the 1870s, continues apace.

Sanctions: A Wrecking Ball In A Global Economy

January 11, 2023 John Perry, Council on Hemispheric Affairs. , ,
Sanctions imposed without United Nations endorsement are illegal. That is why they could be legally imposed on South Africa by a resolution of the UN General Assembly in 1962, but are unlawful when imposed by one government, often with selected allies, against any other country, for whatever reason. Known correctly as “unilateral coercive measures,” such actions are not only contrary to international law in themselves, but may lead to other breaches of the law if their effects are so severe as to become “crimes against humanity.” The report, Sanctions: A Wrecking Ball in a Global Economy, is a comprehensive overview of sanctions on more than 40 countries, imposed by the US and in turn by many of its allies.

How Western Sanctions Blow Back

January 11, 2023 Renate Bridenthal, Geopolitical Economy Report. , , , , , , ,
Economic coercion, through the imposition of sanctions, is an act of war. Many of these sanctions have caused hardship, especially for the civilian populations of targeted countries. But just as a rifle recoils on the shooter’s shoulder, potentially causing injury, so too can sanctions backfire on the user. That is the title of a new book, “Backfire: How Sanctions Reshape the World Against U.S. Interests.” This is not to say that sanctions don’t cause suffering, but they have a mere 13% success rate in altering a targeted state’s behavior in the way desired. The failure of sanctions has long been recognized, although that seems not to have dampened U.S. persistence in adding ever more of them. The blowback effect has begun, and more is predictably on the horizon.

China Pushes De-Dollarization With Gold, Currency Swap Deal

January 9, 2023 Ben Norton, Geopolitical Economy. , , , ,
China’s central bank has taken a series of steps to accelerate the global drive toward de-dollarization, challenging the hegemony of the greenback. The People’s Bank of China is increasing the share of gold in its foreign-exchange holdings, bucking the US dollar, which has for decades been dominant in reserves. This January, China also signed an agreement with Argentina’s central bank for a currency swap deal, in which Beijing will provide 130 billion Chinese yuan (roughly $19 billion USD) to help Buenos Aires stabilize its currency and economy. The South American nation said it is “committed to deepen the use of the RMB [renminbi] in the Argentine market for bilateral exchange”. (Renminbi is the official name for the Chinese currency, also known as the yuan.)

Going Beyond The New International Economic Order

January 5, 2023 Umut Özsu, Progressive International. , , ,
Much has been made of the New International Economic Order (NIEO) since its formal announcement in the UN General Assembly on May Day nearly fifty years ago. As the most sustained attempt to reconfigure international relations since the establishment of the United Nations and Bretton Woods systems after the Second World War, the project served as a lodestone for a remarkably wide range of debates about the law, politics, and political economy of decolonization during the 1970s and into the 1980s. At its core lay a series of demands for greater aid, debt-relief and technology transfer, as well as a desire to facilitate rapid industrialization, secure strong rights to nationalize assets of foreign investors, normalize preferential treatment in international trade for developing countries, institute mechanisms to regulate the activities of multinational corporations, and provide restitution for resources depleted through colonialism and occupation.

US Spreads Misery By Imposing Sanctions On A Third Of Humanity

January 2, 2023 Jeremy Kuzmarov, Covert Action Magazine. , , ,
On November 14, the Biden administration announced yet another round of sanctions on Russia, targeting this time Russia’s military supply chains by imposing sanctions on 14 individuals and 28 entities that it said were part of a transnational network that procured technology to support Moscow in its invasion of Ukraine. One of the companies blacklisted was Milandr, a Russian microelectronics company that Washington says is part of Moscow’s military research and development structure. The sanctions additionally targeted several aviation-related companies and two individuals—Abbas Djuma and Tigran Khristoforovich Srabionov—who facilitated the Russian mercenary Wagner Group’s acquisition of Unmanned Aerial Vehicles (UAVs) from Iran, which have been used in the Ukraine War.

Russia Dropping US Dollar For Chinese Yuan – And Fast

December 27, 2022 Ben Norton, Multipolarista. , , , , ,
Russia has spent years trying to decrease its dependency on the US dollar. But especially since the escalation of the proxy war in Ukraine in 2022, Moscow has accelerated its drive toward de-dollarization. Western sanctions have locked Russia out of the US-dominated international financial architecture. Numerous Russian banks were disconnected from the SWIFT inter-bank messaging system. Washington and Brussels even froze a staggering $300 billion of the Russian central bank’s foreign exchange reserves. In response, Russia’s central bank has largely abandoned the US dollar and euro, and instead it plans to buy Chinese yuan on the currency market. In the span of less than a year, the yuan has quickly replaced the dollar as the most sought foreign currency in Moscow.

The Economic Realities We Face At The End Of 2022

December 20, 2022 Richard D. Wolff, Counter Punch. , , ,
Economies around the world were shocked and damaged over the course of 2022. Global capitalism had been brewing conflicts among the major powers (the United States, China, and the EU) for some time as their relative strengths and vulnerabilities shifted. U.S. capitalism and its empire are widely perceived as waning. Europe’s role as a U.S. ally and indeed its economic future became correspondingly riskier as a result. China’s economic growth encountered problems but continued to be remarkably positive and often crucially supportive of world economic conditions in ways that were once more closely associated with the role of the United States. China’s deepening alliance with Russia as well as its burgeoning global economic reach frightened many in the United States.

Latin America’s Plan To Challenge US Dollar With New Currency

December 4, 2022 Ben Norton, Multipolarista. , , ,
The US dollar is used in the majority of international trade, and its status as the global reserve currency gives the United States an “exorbitant privilege” that underpins its geopolitical and economic dominance. Yet opposition to Washington’s hegemony is growing around the world. Institutions of Eurasian integration are proposing their own currencies and payment systems. Latin America, too, has ambitious plans to end its dependence on the US dollar. Prominent economist Andrés Arauz, a leftist leader who came close to winning Ecuador’s 2021 presidential elections, published a blueprint for a “new regional financial architecture” to unite Latin America, challenging the hegemony of the dollar and Washington-dominated institutions like the International Monetary Fund.

China’s Leadership Shines Bright In Asia’s Moment

December 2, 2022 Danny Haiphong, Black Agenda Report. , , ,
Asia possesses many of the world's largest and fastest-growing economies. In this era of growing discord and crisis in the West, the majority of nations around the world are looking to Asia to set a different example. The region took center stage in the week of November 11 to 18 as the emerging economies of Cambodia, Indonesia, and Thailand hosted the Association of Southeast Asian Nations (ASEAN) Summit, the G20, and the Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting respectively. These important exchanges provided numerous opportunities for major countries to assert their leadership on the world stage. And in this regard, it was China that shined the brightest. One of the highlights was Chinese President Xi Jinping's meeting with U.S. President Joe Biden in Bali, Indonesia ahead of the convening of the G20 summit.

Sanctions: A Wrecking Ball In A Global Economy

November 30, 2022 Popular Resistance. , , ,
Join a discussion of the latest developments in key regions of the world with several authors of the new anthology: SANCTIONS: A Wrecking Ball in a Global Economy.  Intensifying US sanctions, imposed on a third of humanity, are sending shock waves through the world economy. Now this brutal form of economic warfare on civilian populations is being contested. US dollar dominance is being challenged as the currency of global trade. Sanctions have boomeranged back on the US and EU countries with inflation, supply chain shortages, and a looming recession causing hardship at home. But by far the greatest burden is borne by 40+ sanctioned countries. The US response is doubling down on harsher sanctions. What are the implications?
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